During this reporting period the Laboratory of Genetics and Physiology has made progress and elucidated mechanisms by which cytokines control mammary epithelium and hematopoietic cells through the transcription factor STAT5. In addition, LGP has generated for the first time mice in which the gene encoding the transcription factor STAT1 is bracketed by loxP sites and can therefore be deleted in a cell-specific and conditional fashion. Mammary development and cancer We have previously discovered that cytokines control several aspects of mammary gland development and function through the transcription factor STAT5. We have now determined that STAT5 is essential for the establishment of mammary progenitor cells. These findings have demonstrated for the first time that STAT5 not only controls the proliferation and differentiation of mammary epithelium but also controls biological pathways at an early stage of development, namely at the level of mammary progenitor cells. These findings are of basic significance and they shed light on the role of cytokines on stem cell biology. The transcription factor STAT1 is activated by interferons and has proven to be essential for distinct features of the immune system. Loss of STAT1 has also been linked to tumorigenesis in different cell types, including breast. However, it was not clear whether this was the result of the loss of STAT1 from mammary epithelium itself or from mammary-based immune cells. We addressed this question in vivo and generated mice in which the STAT1 gene can be deleted in specific cell types. For this purpose we have generated mice in which the Stat1 gene has been flanked by loxP sites. These studies are in progress. Granulopoiesis We have previously established that key developmental decisions in hematopoietic lineages are controlled by distinct cytokines through the transcription factor STAT5. However, the underlying mechanisms remained an enigma. We have now demonstrated for the first time that the cytokine GM-CSF controls the proliferation and survival of cells in the granulocytic lineage through the transcription factor STAT5. We were able to accomplish this through the use of a unique single cell tracking technology. Without this technology, it would not have been possible to distinguish whether GM-CSF controls cell proliferation or survival, two fundamentally different processes controlled by different genetic networks. Cytokines and hematopoietic stem cells It has been established that cytokines control the fitness of hematopoietic stem cells, which in turn has direct implications on the development and treatment of leukemias. To address the significance of cytokine STAT5 signaling in normal hematopoiesis and neoplastic transformations we established a two-pronged approach. First, we set out to identify genes that are under direct cytokine-STAT5 control in hematopoietic stem cells (HSC) and secondly we studies the role of STAT5 in the establishment, progression and maintenance of leukemias in collaboration with other groups. We performed large-scale gene expression profiling and identified a gene called Ccn3/nov as the most prominent target of STAT5. Notably we were able to demonstrate that this gene is activated by interleukin 3 (IL-3) in HSCs. The Ccn3 gene is of particular interest as it has a defined role in the biology of HSCs and it is highly expressed in leukemias. STAT5 is a potent positive regulator of hematopoietic cell proliferation and experiments had suggested a role in the establishment of BCR-ABL-induced leukemia. Thus inhibiting STAT5 activity might be an efficient means of suppressing different classes of leukemias. However, STAT5 would only prove to be a bona fide target if its presence is required for the progression of disease. We addressed this question in collaboration with Sexl's group in Vienna and deleted the Stat5 gene in mice after leukemias had been established. Remission was observed upon ablating the Stat5 gene and it is clear that STAT5 would be an appropriate target to combat leukemias. The next steps in the development of effective STAT5 inhibitors need to be taken by the pharmaceutical industry.